Chennai witnesses demand for plotted developments rise

Sanjay Chugh

City Head – Chennai, ANAROCK Property Consultants

COVID-19 has drastically altered real estate investment preferences, with plotted developments now trending across cities. In Chennai, key developers have so far launched at least five different plotted development projects comprising >900 units in last 4-5 months. Trends indicate that the corresponding period last year did not see nearly as many plotted development sales as this year.

Prominent locations that saw plotted development projects launched are Iyyappanthangal, Vandalur, Manivakkam, Avadi, and Thirumazhisai. The plot sizes start as low as 560 sq. ft. and go all the way up to 2,400 per sq. ft. or more. Most of these localities are towards the peripheries of the city where average prices hover at Rs 2,500 per sq. ft.

If we consider buyer trends based on current enquiries, the highest demand is for plots sized between 1,000 and 1,200 sq. ft. with average ticket sizes from Rs 25-35 lakh. While some buyers intend to build and occupy homes on these plots, there are also many long-term investors in the mix.

Though land investment is a time-honoured tradition in Chennai, the trend of apartments had drawn more buyer interest over the last decade. However, the COVID-19 pandemic has once again boosted demand for land as a long-term investment alternative. There is also considerable interest in plots in gated societies, where building standalone homes is seen as a safe bet in pandemic-like situations. The rise of the work from home culture is also closely interrelated here.

Demand for ready apartments has not abated since apartments present a lower overall risk – especially with considerable ready-to-move inventory available. However, many Iyyappanthangal sense the benefits of liquidating some of their land holdings and raising working capital via plotted developments. The capital investment required is minimal, the project execution risks low, and developers can exit quicker.

Some of the leading developers who have recently launched projects in this asset category include VGN Projects, TVH Group and RWD Developers, among others.

Top Micro Markets

• Iyyapanthangal

Located in South-West Chennai, Iyyapanthangal has seen decent real estate growth over the last few years. The area’s proximity to the IT Parks of Porur and the Sriperumbudur industrial belt has boosted realty demand in the area. Average prices for plots are around Rs 2,800 per sq. ft.

• Vandalur

The area enjoys good connectivity to the IT corridor of OMR and GST Road and has well-developed infrastructure. Growth here can be largely attributed to factors like the IT belt, industrial growth and quality healthcare institutions. Among the notable upcoming infra projects are the Monorail project. Corridor 1 of monorail connects Vandalur and Tambaram (South Chennai) with Central Chennai through Velachery. Vandalur is expected to benefit with this monorail corridor, though the project is still in its initial stage of implementation. The Main bus terminus is scheduled to be operational in Kilambakkam near Vandalur in early 2021. Average land prices here hover at around Rs 2,500 per sq. ft.

• Avadi

Avadi has quickly emerged as the favourable realty hotspot in Chennai’s western region. Popular for its defence establishments, the area has transformed into a major residential hub with robust physical and social infrastructure, including healthcare and education. Enhanced connectivity to other prominent localities of Chennai via NH 716 is an added advantage. With maximum real estate activity in the affordable and mid-segment categories, Avadi is fast transforming into a buzzing realty hotspot. Average land prices hover at Rs 2,300 per sq. ft.

• Manivakkam

Manivakkam connects Vandalur on the GST Road to Oragadam and Sriperambadur. Situated between Vandalur and Mudichur, 7.5 kms from Tambaram and 2 km from Vandalur, this area is listed in CMDA’s Chennai Metropolitan Area (CMA) [1] master plan and is well-connected to Oragadam and Sriperambadur, Maraimalai Nagar and Mahindra World City by road and suburban railways. Average land prices here are approx. Rs 2,475 per sq. ft.

• Thirumazhisai

Located in Chennai west, the micro market is well connected to other parts of the city by road. The area is reasonably developed with good social infrastructure facilities in and around the area. The avg. land prices in the area stand at approx. Rs 2,400 per sq. ft.